PA Media Group (the UK company formerly known as the Press Association) has acquired Hydrogen, Scotland’s largest specialist social media agency. While financial details have not been disclosed, it is believed that the Hydrogen revenue and the consideration are each under £5m. The profitable Glasgow-based company will operate as a stand-alone agency within PA’s portfolio of media services.
It is the latest in a series of PA deals which peaked two years ago with the acquisition of the 23-year-old, privately-owned Alamy photo library for a price believed to be almost £35m, equivalent to 8x EBITDA. It had an archive of almost 200m images and videos, sourced from a network of 100k photographers and 650 picture agencies. More important, the UK-based Alamy was generating 65% of its £25m revenue from international markets including more than 40% from the US, AsiaPacific and India. It was said the deal would increase PA Media Group revenue and profit by at least 30% as well as internationalising the company, which would derive more than 25% of its revenue from outside the UK.
The latest financials for 2021 confirm how PA has delivered on its promise (with 10% growth in revenue and now with 30% from outside the UK/ Ireland) – despite the pandemic:
£m | 2021 | 2020 | 2019 | 2018 |
| Revenue | 99.1 | 90.1 | 73.1 | 70.2 |
| % from outside UK/ Eire | 30% | 30% | 15% | 15% |
| EBITDA | 15.1 | 15.4 | 9.7 | 8.4 |
| Margin | 15% | 17% | 13% | 12% |
| Net assets | 61.9 | 72.2 | 66.9 | 39.1 |
| Headcount | 918 | 1,016 | 884 | 859 |
The Press Association was founded in 1868 (22 years after the launch of Associated Press in the US) by British daily newspaper proprietors who wanted a more reliable alternative to the monopoly service of telegraph companies. It actually once owned Reuters.
PA is owned by some 20 UK media companies including Reach, News Corp, DMGT, Telegraph Media Group, and Informa, but is no longer just the country’s national news agency. The steady growth, which has seen profit increase from £6m in 2017 to £15m in 2021, has been achieved not just with self-funded acquisitions but also with paying-off the company’s pension deficit. But it also reflects a stunning transformation.
A decade ago, more than 50% of PA revenue still came from its traditional newswire and content services for UK and Irish media. But it was rapidly growing new businesses.
Last year, the news services accounted for just 24% of PA. The rest comes from Alamy, leisure and sports content, betting data, and from a clutch of companies including: Sticky Content (digital content marketing), Globelynx (a network of experts remotely interviewable on TV), and StreamAMG (sports streaming). Along the way, it has bought and built what is claimed to be Europe’s leading media, journalism and PR training company. These subsidiaries have been acquired, during the last 12 years, through the £150m proceeds of PA’s sale of the Meteo weather group, of its 50% stake in Canada Newswire, and of its £40m Central London headquarters.
It’s a big change from 2010 when the Press Association had a pension deficit of up to £20m, double the headcount of now, and sliding profits. That was the year when PA was reeling from profit lost through the closure of two London evening newspapers and from the collapse of the UK’s once powerful Teletext service. It was also the year when PA’s CEO Clive Marshall and its non-executive chair Murdoch MacLennan (then CEO of Telegraph Media Group) were both appointed.
Marshall – who had formerly been commercial director of PA as well as CEO of its Australian counterpart – has built the “new” company not least by making it a welcoming home for a diverse range of entrepreneurial media services. PA has been able to convert learn-as-you-go investments into significant acquisitions through light-touch management – and staying away from high-priced auctions.
In its 12 years of transformation, PA Media Group’s traditional newspaper customers have lost much of their advertising and many of their readers. But PA’s own shareholders have enjoyed almost £100m of dividends from a media services portfolio which just keeps growing – and may now be worth £250m+. Just saying.
